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U.S. Regulators Continue to Change Cable TV Franchising Rules

7:00 am on June 19, 2006 | Category: Regulation, Telecom Services, Television

In hopes of a quick entrance into the fiber optic IPTV market, telephone companies across America are lobbying regulators to rewrite the rules surrounding cable television franchising authority.

As it stands now, individual municipal governments have the sole power to grant and refuse licenses to cable television providers, making it a difficult and arduous process for telephone carriers to enter the market on a wide-scale basis.

Companies like Verizon and AT&T and pushing for a statewide, or even nationwide, franchising system, which would allow them to offer IPTV service without haggling with each individual local government.

Telecom lobbyists claim that such a system would establish a more fair and competitive market for consumers, while municipalities and cable companies argue that it would give too much power to telecom monopolies, hurting users in the long run.

Many consumer advocates believe that blanket cable franchising would let the new players offer service only in more affluent neighborhoods, putting IPTV out of reach of lower income residents, and increasing the digital divide.

“AT&T has been very clear its business plan is to target the high-value customer. Where Verizon has sought local franchise agreements, it has sought them only in the wealthiest communities,” said senior policy analyst, Jeannine Kenney of the Consumers Union. “Consumers who most need relief from monopolistic cable prices are the least likely to get it.”

At this point in time, however, many state governments are taking a risk, and changing the franchising rules, in hopes of a healthier and more competitive market. Texas, Indiana, Kansas, and South Carolina have all implemented some kind of statewide approval process, while Connecticut has gone a step further, ruling that IPTV providers arenâ€™t cable services, and donâ€™t need to obtain cable franchises at all. Virginia, meanwhile, has put a time limit on municipal negotiation times.

Nine other states are currently looking at changing the franchising rules, and the U.S. Senate will soon vote on the idea of a national approval system.

Just what effect all this will have on American television subscribers remains to be seen, but it looks like telecom providers are going to get a fair shot at proving their many critics wrong.

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